The law relating to business tenancies is in many ways the same as for any other type of tenancy, except that the tenant has a right to apply to the county court for the grant of a new lease when his tenancy ends.
A business tenancy exists when premises or part premises are let for a specified term in return for rent. Open land can also be used in this way, for example as a depot or for storage. A different set of rules apply to agricultural land.
There are three ways in which a tenancy can be created:
- By a lease which is a formal document –usually a deed. This is the most common way of creating a business tenancy.
- By a tenancy agreement – usually for tenancies of three years or less. This is not a deed and is generally referred to as a tenancy agreement rather than a lease.
- By a spoken arrangement by the parties. This can happen when a landlord gives the tenant possession in return for rent. This is not advisable for several reasons – the landlord would not be able to prove what the terms of the oral agreement were and would have no right to take back his premises should the tenant fail to pay his rent. A tenant would still have the right to apply to the court for renewal under this arrangement.
Oonagh McKinney heads our Commercial Property Team, advising landlords and tenants across Dorset. She comments “A business tenancy is likely to last for a number of years and it is vitally important that both parties understand their obligations. The landlord’s concern is to ensure that his rental income is secure and his property is maintained. A tenant will need to be satisfied that the lease conditions are reasonable.”
Our Commercial Property team will be happy to advise you on any aspects of business tenancies.